Perchance to tax

In a sparkling Economic View in yesterday’s London Times Patrick Hosking proposed six new taxes which the chancellor might usefully impose in tomorrow’s budget to reverse the normal procedure of taxing virtuous activities such as working, thrift and nest building & place the burden instead on products such as caravans, burglar alarms, dog food, billboards & chewing gum which, used antisocially, impose costs & induce irritation in the rest of us.

Meanwhile, over on the New York Times Economix blog, Catherine Rampell was reporting that some cash-strapped states in America are lowering existing sin-taxes on cigarettes, alcohol & strip clubs in an effort to stimulate demand & increase the tax-take.

For there’s the rub. We can rely upon the stubbornness of sinners only so far, only to the point where their previously inelastic demand for the irritant of choice suddenly gets some stretch, becomes elastic & sensitive to price, & they start searching the market for some untaxed & previously blameless good with which to infuriate us.

Link
Lowering Sin Taxes to Attract Those Lucrative Sinners

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